2014

Vapor Corp. Reports Full Year 2012 Results Company Prepares for Future Growth, Makes Key Investments in Infrastructure; Innovation Fuels Its Continued Leadership Position in Growing Market for Premium E-Cigarette Products & Accessories

DANIA BEACH, Fla., April 1, 2013 /PRNewswire/ -- Vapor Corp. (OTCQB: VPCO; "Vapor" or the "Company"), a leading U.S. based electronic cigarette company whose brands include Fifty-One®, Krave®, VaporX®, EZ Smoker®, Alternacig®, Green Puffer®, Americig®, Fumare™, Hookah Stix™ and Smoke Star®, today announced its results for the full year ended December 31, 2012.

Financial Highlights for the Full Year Ended December 31, 2012

  • Net sales reached a record $21.4 million, an increase of 33.6% year-over-year stemming from increased sales through new distributors and wholesale customers, as well as increases in direct to consumer sales.
  • Cost of goods sold rose 96.4% to $13.2 million as compared to the previous year, primarily resulting from increased distributor and wholesaler sales, which have lower gross margins than direct sales to consumers. 
  • Gross margins decreased to 38.1% from 57.8% the prior year as a result of the product mix and the above factors.
  • Selling, general and administrative expenses increased to $6.9 million, up 65.1% from the prior year due to increases in infrastructure costs and the hiring of key management and personnel. These investments in infrastructure and personnel will benefit us in 2013 as we are well positioned to service and support our customer needs and our anticipated growth.
  • Advertising expenses decreased 10.1% year-over-year to $3.6 million as we decreased expenses paid to certain direct marketing campaigns, while increasing brand awareness through various product marketing and advertising campaigns. Our advertising efforts have created effective brand presence and awareness and we expect to continue to leverage and increase our brand presence and awareness through our distribution channels with effective advertising campaigns in 2013.
  • Interest expense was $89,348 as compared to $0 in the prior year. The increase was attributable to the issuance of  new debt during 2012.
  • Net loss was ($1,920,972) versus net income of $713,338 for the prior year as a result of the above factors.
  • We ended the year with working capital of $325,836 compared with approximately $1.3 million at year end the prior year as a result of the above factors.

Kevin Frija, Chief Executive Officer of Vapor Corp., commented, "With continued sales growth, an increase of 33.6% year-over-year, we are happy to have achieved our fourth consecutive year of sales growth. This is encouraging for our efforts in 2013, as we have major initiatives lined up, the most important of which is the expansion of our soft tip filters and Krave King product line. 2012's results were as we anticipated with record sales of $21.4 million offset by heightened expenses incurred as we made certain strategic investments in the business. We brought on our co-founder Jeffrey Holman as President, Harlan Press as our Chief Financial Officer and Christopher Santi as our Chief Operating Officer. Assembling this executive team was critical to building a solid foundation for the Company to operate effectively, strategize intelligently, and in essence, execute on all of our expansion initiatives. We now believe we have the right management team in place to take the Company to its next stage of growth."

In terms of market presence, he continued, "By our estimates, we're holding a strong position in the e-cigarettes market and continue to see our share of that market grow. We invested aggressively in expanding our product offerings including the launch and introduction of our new innovative soft-tip filters and Krave King product line, which have helped establish our brand presence and awareness. We believe that our recent customer 'wins' are largely attributable to these investments. We have enhanced our nationwide distribution capacity through our existing distributors and master distributor partners.  Our expansion into Canada during 2012 has helped fuel our growth."

Looking ahead, Mr. Frija stated, "We remain staunchly committed to investing in the long-term growth of the company and its brands, reinvesting in, marketing & advertising, trade shows and conferences, product development, patent protection, personnel and operations while offering our customers the quality, value and thoughtful innovation and improvements they have come to expect in our products. We believe that these measures will insure that we continue to gain greater brand presence and awareness with the vaping community."

About Vapor Corp.

Vapor Corp., a publicly traded company, is a leading U.S. based electronic cigarette company, whose brands include Fifty-One®, Krave®, VaporX®, EZ Smoker®, Alternacig®, Green Puffer®, Americig®, Fumare™, Hookah Stix™ and Smoke Star®. We also design and develop private label brands for some of our distribution customers. "Electronic cigarettes" or "e-cigarettes," are battery-powered products that enable users to inhale nicotine vapor without smoke, tar, ash or carbon monoxide. Vapor's electronic cigarettes and accessories are available online, through direct response to our television advertisements and through retail locations throughout the United States. For more information on Vapor Corp and its e-cigarette brands, please visit us at www.vapor-corp.com.

Safe Harbor Statement

This press release contains certain forward-looking statements that are made pursuant to the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. Words such as "expects," "anticipates," "plans," "believes," "scheduled," "estimates", "will" and variations of these words and similar expressions are intended to identify forward-looking statements. These forward-looking statements concern Vapor's operations, economic performance and financial condition and are based largely on Vapor's beliefs and expectations. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Vapor to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Certain of these factors and risks, as well as other risks and uncertainties are stated in Vapor's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and in its subsequent filings with the U.S. Securities and Exchange Commission. These forward-looking statements are made as of the date of this press release, and Vapor assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.


VAPOR CORP.

CONSOLIDATED BALANCE SHEETS



DECEMBER 31,


2012

2011

ASSETS



CURRENT ASSETS:



Cash

$      176,409

$      356,485

Due from merchant credit card processors, net of reserve for charge-backs of $15,000 and

$40,000, respectively

1,031,476

661,575

Accounts receivable, net of allowance of $61,000 and $80,000, respectively

748,580

624,593

Inventories

1,670,007

2,234,834

Prepaid expenses

465,860

639,660

Income tax receivable

47,815

-

Deferred tax asset, net

222,130

143,037

TOTAL CURRENT ASSETS

4,362,277

4,660,184




Property and equipment, net of accumulated depreciation of $16,595 and $5,144

respectively

 

25,190

 

27,323

Other assets

12,000

12,000

TOTAL ASSETS

$   4,399,467

$   4,699,507




LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)



CURRENT LIABILITIES:



Accounts payable

$   3,208,595

$1,628,940

Accrued expenses

350,151

284,042

Customer deposits

477,695

675,000

Income taxes payable

-

724,356

TOTAL CURRENT LIABILITIES

4,036,441

3,312,338




LONG-TERM DEBT:



Senior convertible notes payable to related parties, net of debt discount of $3,530 and $0

respectively

346,470

 

-

Senior note payable to stockholder

500,000

-

TOTAL LONG-TERM DEBT

846,470

-

TOTAL LIABILITIES

4,882,911

3,312,338




COMMITMENTS AND CONTINGENCIES






STOCKHOLDERS' EQUITY (DEFICIENCY):



Preferred stock, $.001 par value, $1,000,000 shares authorized, none issued



Common stock, $.001 par value, 250,000,000 shares authorized 60,185,344 shares issued

and outstanding

60,185

 

60,185

Additional paid-in capital

1,637,377

1,587,018

Accumulated deficit

(2,181,006)

(260,034)

TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)

(483,444)

1,387,169

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

$   4,399,467

$   4,699,507





VAPOR CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS



FOR THE YEAR ENDED

DECEMBER 31,


2012


2011





SALES NET

$21,352,691


$15,982,097

Cost of goods sold

13,225,008


6,732,335

Gross Profit

8,127,683


9,249,762

EXPENSES:




Selling, general and administrative

6,865,633


4,157,638

Advertising

3,559,616


3,961,946

Total operating expenses

10,425,249


8,119,584

Operating (loss) income

(2,297,566)


1,130,178





Other expense:




Interest expense

89,347


-

Total other expenses

89,347


-





(LOSS) INCOME BEFORE INCOME TAX (BENEFIT) EXPENSE

(2,386,913)


1,130,178

Income tax (benefit) expense

(465,941)


416,840

NET (LOSS) INCOME

$(1,920,972)


$713,338

BASIC AND DILUTED NET (LOSS) INCOME PER COMMON

SHARE

$                     (0.03)


$               0.01

WEIGHTED AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING – BASIC AND DILUTED

 

60,185,344


 

60,176,303

 

SOURCE Vapor Corp.



RELATED LINKS
http://www.vapor-corp.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.